If you fail to understand what’s happening inside the practice in the back office in terms of billing and account receivable, you can never determine the status of the organization. For example, can your healthcare organization meet your business demands, or are the financial goals falling short? Depending on the challenges you come across, how will you plan to either continue with the improvements or stop a downward trend in profit matters.
Your team will be happy when you have comprehensive support from healthcare debt recovery services. Therefore, practices must focus on tracking key performance indicators as a part of the revenue cycle management.
In this blog, we’ll focus on critical billing and collections key performance indicators (KPIs). Each stage of the cycle helps you spot what’s needed in the long run.
Keep a close tab on the bad debt rate
Not all patients are able to pay their bills on time, and indeed you have taken this into account as you review all revenue coming into the practice. But debt rate expressed as a percentage is one of the essential medical billing KPIs you will want to be tracking. Agents from healthcare debt collection will simply calculate this percentage by dividing allowed charges by bad debt write-offs.
Gross collection rate
You need to calculate the gross collection rate by dividing money from payments by the billed charges. This is a useful measurement to make comparisons of the organization’s cash flow.
Hospital revenue cycle management helps you study fluctuations; you can now get a better idea of what future collections will be like. Besides, changes in patient populations, fees, and insurance providers will always affect the gross collection rate.
Net collection rate
To understand the revenue collection, you need to collect out all bills you are eligible to be paid for. Healthcare debt recovery services will work on the net collection. It is determined by dividing payments by all allowed charges. With the net collection rate, you can compare different groups in the company, observing demographic changes affecting the percentages the team collects.
Learning how efficiently your healthcare debt recovery services plan an effective resolve rate will show you how disciplined the staff is in managing the flow of revenue. The calculation is done by dividing the number of claims in a given period by the total claims paid in that same span.
More significant percentages indicate a better rate. However, come up with a lower rate than you prefer. It might be time to consult with professionals to see issues with how your staff verifies patient eligibility or if you are making errors in coding.
A high denial rate can be a disaster. The hospital revenue cycle management divides the number of claims denied by the number of claims remitted, giving you this rate. This tends to range from about 5-10 percent in the healthcare industry in the U.S.
For many organizations, manual collections are the bottleneck, with a solution to automate the collections processes.
The hospital revenue cycle management helps track funds according to payers and clients to better understand where the profits are coming from. It would be best to compare areas that are the most profitable for clients. This KPI helps you identify which tests are causing the most problems in getting reimbursed.
Medical practices need to pay close attention to the details when it comes to billing. Tracking medical KPI helps you stay aware of improvement. In addition, a dedicated system will help you make a difference in the long run.